What can Biden do about it? His best response was to leave the Federal Reserve alone to battle inflation. He doesn’t get much credit for that. Biden has also had success touting his fight to end junk fees and his $35-a-month cap on insulin prices for those on Medicare. (The insulin cap is such a victory that Biden’s opponent is wrongly trying to claim credit for it.)
Biden’s most effective tactic against inflation so far has been to blame it on corporate greed. There’s some evidence that in 2022, when many shoppers were willing to pay about anything to get what they wanted, companies hiked prices with little pushback (now retailers are having to slash prices).
But I can’t help wondering how much stronger an inflation fighter Biden would seem today if he had enacted his “care economy” agenda.
Remember the care-economy plan? Biden campaigned on it in 2020 and included it in his Build Back Better agenda. It was going to be a big investment in affordable child care, free preschool for all 3- and 4-year-olds in America, and an expansion of home health aides to care for the elderly. These initiatives would have touched tens of millions of households — and would have tangibly lowered costs for families. But they weren’t going to be cheap.
In 2022, Biden had to choose: Should he invest in reviving U.S. manufacturing and fighting climate change — the “manly stuff,” as one administration staffer described it to me? Or was it the moment to transform the care economy — the “womanly stuff”? The price tag was about $5 trillion for everything the president wanted to do, and that was too high to pass the Senate. In the end, Biden and Senate Democrats went with infrastructure, semiconductors and clean energy.
That might have been the wrong choice. And Biden might be making the same mistake again this year by not campaigning on his plan to address kitchen-table economics. Lowering child-care costs should be a prominent message.
Industrial policy takes years — even decades — to bring major benefits. Yes, Biden’s investments have prompted a manufacturing investment boom, visible in places such as Phoenix and Columbus, Ohio. But in an economy with 168 million workers, the nationwide impact has so far been modest.
Meanwhile, America’s child-care crisis has been evident to everyone since the pandemic. When schools and day-care centers were closed, parents couldn’t work. The case for action was clear: Young children would benefit from quality child-care and pre-K programs. And parents, especially moms, could join the labor force. This is a proven model. Other nations that have made big investments in child care, such as Japan and Canada, have seen a substantial boost in the number of women in the workforce.
But Biden didn’t make his investment in the care economy. Many blame Sen. Joe Manchin III, the West Virginia Democrat who, with Sen. Kyrsten Sinema (I-Ariz.), insisted on lowering costs in the final bill. The for-profit child-care industry might also have played a role by lobbying against some aspects.
“We had a lot of heartache when that ended up on the cutting-room floor,” said Jennifer M. Harris, a former National Economic Council official.
Some have tried to argue that maybe the nation doesn’t need care-economy investments. After all, women have returned to work. Labor-force participation for women ages 25 to 54 is at an all-time high. But dig a little deeper and the picture isn’t so rosy. The great return of working women has been driven almost entirely by immigrants and women with college degrees. The number of women reporting that child-care issues are forcing them to reduce hours and work part-time is far greater than in the past. Parents with children at home have reported sharp declines in financial well-being since 2021, according to Federal Reserve data. Then there’s the fact that, since 1991, child-care and preschool costs have risen at nearly double the rate of inflation, and more than half of Americans live in a “child-care desert” where it’s difficult, if not impossible, to find a licensed day care with openings nearby. A new KPMG report calls the lack of access to U.S. child care a “headwind to economic growth.”
It’s hard to know how much better the economy — or the polls — would be if the care-economy agenda had passed. But voters want relief on costs that overwhelm their budgets. The president can’t do much about gas and food prices, but he could have helped with child care, preschool and eldercare.
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